Recognition and enforcement of foreign judgments in Malaysia

Yes. The enforcement of a foreign judgment in Malaysia could be effected through either statutory enforcement or the common law rules of enforcement. 

There are three statutes which each sets out the legal framework on the recognition and enforcement of: (a) foreign monetary judgments; (b) maintenance orders; and (c) probate or letters of administration; which were made in or granted from the countries stipulated therein. This Guide will only address foreign monetary judgments.

For foreign monetary judgments from countries that are not covered by any of the statutes, enforcement can be carried out by way of an action in common law. A fresh action will have to be commenced in court for the enforcement of such foreign judgement.

The Reciprocal Enforcement of Judgment Act 1958 (“‘REJA”)

REJA is the applicable statute for enforcement of foreign monetary judgments obtained in the United Kingdom, Hong Kong Special Administrative Region of the People’s Republic of China, Singapore, New Zealand, Republic of Sri Lanka (Ceylon), India (excluding State of Jammu and Kashmir, State of Manipur, Tribal areas of State of Assam, Scheduled areas of the States of Madras and Andhra), and Brunei Darussalam. 1 First Schedule of REJA.

A foreign monetary judgment from a REJA stipulated country may be enforced by way of an application to the High Court in Malaysia. 

To qualify for registration, the foreign judgment must be: 

1. from a superior court of the stipulated country; 2 Section 3(1); First Schedule of REJA.
2. must be final and conclusive under which a sum of money (not being taxes, or charges of like nature, or in respect of a fine or penalty) is payable;
3. must be within a six-year period from the date of the judgment; 
4. must not have been fully satisfied by the judgment debtor; and 
5. must be enforceable by execution in the country of the original court. 3 Section 4(1) of REJA.

Once registered, the foreign judgment will be treated as though it was a judgment given by the High Court in Malaysia. 

The procedure to apply for registration of a foreign monetary judgment under REJA is briefly as follows:

1. The judgment creditor files an originating summons supported by affidavit exhibiting the original copy of the foreign judgment or a verified, certified or authenticated copy of the same in the High Court. 
2. The affidavit must state, among others, that: (i) the judgment creditor is entitled to enforce the judgment; (ii) the judgment debt has not been satisfied at the date of the application; (iii) the judgment does not fall within any case in which a judgment may not be ordered to be registered under REJA (elaborated below); and (iv) the judgment can be enforced by execution in the country of the original court at the date of the application.
3. The grounds upon which a judgment may not be ordered to be registered or which would entitle a judgment debtor to set aside the registration are set out in section 6 below. 
4. Upon satisfying the criteria, a registration order would be pronounced by the High Court. The registration order and a notice of registration must be served personally on the judgment debtor. 4  Section 4 of REJA; O. 67 r. 3 of the Rules of Court 2012.
5. The registration order shall state the period within which an application may be made to set aside the registration (typically 14 days from service of the registration order) and shall contain a notification that execution on the judgment will not issue until after the expiration of that period. 5 O. 67 r. 5(2) of the Rules of Court 2012.  The High Court may also, on an application made at any time while it remains competent for any party to apply to have the registration set aside, extend the period within which an application to have the registration set aside may be made. 6 O. 67 r. 5(3) of the Rules of Court 2012.  
6. The notice of registration must set out: (i) the full particulars of the judgment registered and the order for registration; (ii) the name and address of the judgment creditor or his solicitor on whom any summons/application issued by the judgment debtor may be served; (iii) the right of the judgment debtor to apply to have the registration set aside; and (iv) the period within which an application to set aside the registration may be made. 7  O. 67 r. 7(3) of the Rules of Court 2012.

1. In respect of the statutory registration via REJA:
   1. the foreign court must have exercised jurisdiction which the Malaysian courts will recognise, the judgment must be final and conclusive, and the judgment must be for a fixed debt if the action is in personam. 8 Sakuragawa Pump (S) Pte Ltd v Perkapalan Mesra Sdn Bhd [2007] 7 MLJ 555 (High Court).
   2. a Malaysian court may refuse to register a foreign judgment or set aside a registered foreign judgment on one or more of, among others, the following grounds:
      1. the judgment is not final or conclusive e.g., the order provides parties with an avenue to apply to vary or modify the order; 9 Charles Priya Marie v Koshy A/L Cherian [2010] MLJU 425 (High Court).
      2. the judgment is not a judgment to which REJA applies e.g., an arbitration award instead of a foreign judgment; 10  Jacob and Toralf Consulting Sdn Bhd & Ors v Siemens Industry Software Gmbh & Co Kg [2018] MLJU 2116 (High Court).
      3. the original court which issued the judgment had no jurisdiction e.g., a judgment of the Singapore subordinate courts is not registrable under REJA; 11 Charles Priya Marie v Koshy A/L Cherian [2010] MLJU 425 (High Court).  and
      4. the judgment contradicted public policy e.g., the registration of a judgment that offends the principle of res judicata. 12 Mann Holdings Pte Ltd & Anor v Ung Yoke Hong [2019] 8 MLJ 186 (High Court).
2. In respect of registration of foreign monetary judgments by way of an action under common law:
   1. the action may be instituted by way of a writ action. Upon service of the writ and statement of claim on the judgment debtor, the judgment creditor may file for summary judgment to be entered against the judgment debtor. Alternatively, the action may be commenced by way of originating summons supported by an affidavit. An order in terms of the originating summons would be granted if the court is satisfied that the judgment ought to be enforced. 13 Png Oxygen Ltd v Lim Kok Chuan [2018] MLJU 283 (High Court); Delta Design Decor LLC v Pembinaan SPK Sdn Bhd [2015] 5 CLJ 509 (High Court).
   2. the judgment must be final and conclusive, the foreign court has jurisdiction which is in accord with the private international law of Malaysia, and that there is no defence to its recognition. 14 PT Sandipala Arthaputra v Muehlbauer Technologies Sdn Bhd [2021] MLJU 1063 (High Court).

No. Upon registration under REJA, a foreign judgment will have the same force and effect from the date of registration as if it had been a judgment obtained in the Malaysian court. 

The Malaysian courts would also not revisit the factual or legal findings in a judgment from the original court as a foreign judgment is not impeachable on its merits. 15 Malayan Banking Berhad v Ng Man Heng [2005] 1 MLJ 470 (High Court); MBF Finance Bhd v Yong Yet Miaw & Anor [1991] 2 MLJ 320 (High Court).

The enforcement procedure is generally straightforward and can be completed within 1-2 months, provided that there is no challenge. 

A judgment debtor may challenge the registration of a judgment under REJA by applying to set aside the same on any one of the following grounds:

1. The judgment is not a judgment to which REJA applies or was registered in contravention of REJA;
2. The original court which issued the judgment had no jurisdiction in the circumstances of the case;
3. The judgment debtor, being the defendant in the proceedings in the original court, did not receive notice of those proceedings in sufficient time to enable him to defend the proceedings and did not appear;
4. The judgment was obtained by fraud;
5. The enforcement of the judgment would be contrary to public policy in Malaysia;
6. The rights under the judgment are not vested in the person by whom the application for registration was made;
7. The matter in dispute in the proceedings in the original court had previously to the date of the judgment in the original court been the subject of a final and conclusive judgment by a court having jurisdiction in the matter; 16 Section 5(1) of REJA.  and
8. The service of the notice of registration on the judgment debtor was badly effected. 17 The Ka Wah Bank Ltd v Low Chung Song & Ors [1998] 2 MLJ 507 (High Court).

To set aside the registration of a judgment, the judgment debtor must file a notice of application supported by affidavit and shall serve a copy of the same on the judgment creditor. The court will fix a hearing date thereafter to determine the application. 18 O. 67 r. 9 of the Rules of Court 2012.

In an action for enforcement of a foreign judgment at common law, the following defences, which are similar to the grounds to set aside the registration of a judgment under REJA, can be raised to challenge enforcement of the judgment:

1. The original court which issued the judgment had no jurisdiction in the circumstances of the case;
2. The judgment was obtained by fraud or collusion; 
3. The enforcement of the judgment would be contrary to public policy in Malaysia;
4. The proceedings in which the judgment was obtained were opposed to natural justice. 19 See Hua Daily News Bhd v Tan Thien Chin & Ors [1986] 2 MLJ 107 (Supreme Court). Breach of natural justice focuses on the irregularity of the proceedings, whether the defendant was properly notified of the proceedings, legally represented at every stage of the proceedings or given the opportunities to be heard at every level of the judicial system. 20  PT Sandipala Arthaputra v Muehlbauer Technologies Sdn Bhd [2021] MLJU 1063 (High Court).

Yes. Section 38 of the Arbitration Act 2005, supplemented by Order 69 Rule 8 of the Rules of Court 2012, provides a summary procedure for recognition and enforcement of arbitral awards that is applicable both to arbitral awards where the seat of arbitration is in Malaysia and to foreign awards sought to be enforced in Malaysia.

A party seeking to recognise an arbitral award will need to make an application to the High Court in Malaysia by way of an originating summons, and can be done so on an ex-parte basis. 21 O. 69 r. 8(1) of the Rules of Court 2012; Section 38(1) of the Arbitration Act 2005.

The application must be accompanied by the duly authenticated original copy of the award or a duly certified copy of the same, and the original arbitration agreement or a duly certified copy of the same. 22 O. 69 r. 8(3) of the Rules of Court 2012; Section 38(2) of the Arbitration Act 2005.  In practice, a duly certified copy of the award as well as the arbitration agreement by an authorised person (solicitor/notary public) will be accepted by the court as prima facie evidence in support of the enforcement application. 

A copy of the application and the order giving permission to enforce the award must be served on the respondent. The respondent has 14 days from the service of the order to apply to set aside the order, failing which the applicant will be entitled to enforce the arbitration award. 23 O. 69 r. 8(7) of the Rules of Court 2012.

Upon the lapse of the said 14 days from the service of the order, assuming there is no application to set aside the order, the arbitration award can be enforced as if it were a judgment of the High Court in Malaysia.

It very much depends on whether there is any application to challenge the recognition/enforcement of an award. 

If not challenged, the recognition/enforcement procedure should take around 1-2 months.

Yes. An award debtor may challenge the recognition/enforcement of an award in limited circumstances. 

Section 39 of the Arbitration Act 2005 sets out the exhaustive grounds for refusing recognition or enforcement, which corresponds with Article 36 of the UNCITRAL Model Law if the party making the application proves that:

1. a party to the arbitration agreement was under any incapacity;
2. the arbitration agreement is invalid under the law to which the parties have subjected it;
3. the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present that party’s case;
4. the arbitration award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;
5. the arbitration award contains decisions on matters beyond the scope of the submission to arbitration;
6. the composition of the arbitral tribunal or arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the Arbitration Act 2005 from which the parties cannot derogate, or, failing such agreement was not in accordance with this Act;
7. the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which the award was made;
8. the dispute is not capable of settlement by arbitration under the laws of Malaysia; or
9. the award is in conflict with the public policy of Malaysia.

In practice, parties seeking to challenge an application to recognise or enforce an arbitral award would usually file an application to set aside the arbitral award. The grounds to set aside an arbitral award are similar to the grounds for challenging the recognition/enforcement of the Award, except for paragraph g. It is also further provided in section 37 that an award is in conflict with the public policy of Malaysia where:

1. the making of the award was induced or affected by fraud or corruption; or
2. a breach of the rules of natural justice occurred – 
   1. during the arbitral proceedings; or
   2. in connection with the making of the award.

To this end, both applications are usually heard together by the High Court. A dismissal of an application to set aside would conversely result in the arbitral award being registered, and vice versa.

10.1 Domestic Arbitral Awards

The application for an exequatur order for domestic arbitral awards is an ex parte proceeding. This means that the order could be issued without needing to hear the award debtor. However, it is not uncommon for the losing party to challenge the enforcement and execution process. Based on our experience, a losing party will usually rely on the absence of clarity on the definition of public order/policy grounds to challenge the enforcement of a domestic arbitral award on the basis that the arbitral award violates Indonesian public policy.

10.2 Foreign Arbitral Awards

The general approach of the Malaysian courts in dealing with an application to challenge the enforcement of an arbitral award/set aside an arbitral award is set out below:

1. Recognise that the arbitration award is final, binding and conclusive and can only be challenged in exceptional circumstances. 24 Intelek Timur Sdn Bhd v Future Heritage Sdn Bhd [2004] 1 MLJ 401 (Federal Court).
2. The listed grounds for refusal of recognition are exhaustive. Therefore, if no ground is present, the award must be recognised. 25 CTI Group Inc v. International Bulk Carriers SPA [2017] 5 MLJ 314 (Federal Court).
3. Only the dispositive portion of the arbitral award, and not the reasoning or findings of the arbitral tribunal, is to be registered. As the whole intent and purpose of section 38 is to ensure that the reliefs granted by the arbitral tribunal can be enforced by way of execution proceedings through the courts, the reasoning or findings of the arbitral tribunal would not be relevant. 26 Siemens Industry Software Gmbh & Co Kg (Germany) v Jacob and Toralf Consulting Sdn Bhd [2020] 3 MLJ 1 (Federal Court).
4. The recognition and enforcement process under sections 38 and 39 of the Arbitration Act 2005 read together with Order 69 of the Rules of Court 2012 is a two-stage process starting with an ex parte proceeding (subject to the power of the court requiring service of the application) to obtain an order giving permission to enforce an arbitral award and a subsequent inter partes proceeding stage where the court will deal with the application to set aside the ex parte order giving leave to enforce the arbitral award. 27 CTI Group Inc v. International Bulk Carriers SPA [2017] 5 MLJ 314 (Federal Court).
5. The courts do not exercise appellate jurisdiction over arbitration awards and therefore will not examine correctness of a claim on its merits. 28 Garden Bay Sdn Bhd v Sime Darby Property Bhd [2018] 2 MLJ 636 (Court of Appeal).
6. The courts cannot sit in appeal over the views of the arbitral tribunal by re-examining and re-assessing the materials before the material tribunal. 29 Far East Holdings Bhd & Anor v Majlis Ugama Islam Dan Adat Resam Melayu Pahang and another appeal [2015] 4 MLJ 766 (Court of Appeal).
7. The jurisdiction to set aside or remit an arbitral tribunal’s award is one that should be exercised with great care and a proper sense of responsibility. 30 Garden Bay Sdn Bhd v Sime Darby Property Bhd [2018] 2 MLJ 636 (Court of Appeal).
8. Lack of appraisal of the law or the evidence is not a ground to set aside or remit an award for reconsideration.
9. The arbitral tribunal should be regarded as the master of the facts 31 Georges SA v Trammo Gas Ltd, The Baleares [1993] 1 Lloyd’s Rep 215 (Court of Appeal).  and of the arbitral process. 32 Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and other appeals [2018] 1 MLJ 1 (Federal Court).
10. The court would also bear in mind the background policy of encouraging arbitral finality and minimalist intervention approach to be adopted in line with the spirit of UNCITRAL Model Law. 33 Jan De Nul (M) Sdn Bhd & Anor v Vincent Tan Chee Yioun & Anor [2019] 2 MLJ 413 (Federal Court).